May 5, 2019

How McDonald's Is Using AI To Enhance the Value of Convenience

The company's use of AI and machine learning is laser focused on speed, convenience - and adding complementary menu items to increase the bill while reducing the hassle. JL

Lana Bandoim reports in Forbes:

With personalization technology, McDonald's will
guide the time-crunched drive-thru visitor through individual
menu choices. McDonald's will tap this technology to suggest complementary
menu items. "The use of machine learning to
dynamically tailor the ordering experience is a nice fit for drive-thru dining. Drive-thru needs to be frictionless to avoid
customer frustration and delays for the convenience-oriented.
McDonald’s new technology will improve order process speed while still offering personalization. McDonald's utilizes technology that augments the perceived value of convenience. The next level of restaurant tech will use voice assistants.

From convenience to savings, the way consumers view value is changing. McDonald's acquisition of Dynamic Yield shows it thinks that personalizing the drive-thru with technology will help it stay competitive, and a new report from Valassis shows how restaurants can attract more customers with value in mind. Marc Mathies, vice president of product at Valassis, shared his thoughts in an interview.

The report from Valassis found that one in five consumers visit fast food, fast casual or pizza restaurants one or more times a week. Offers and promotions can entice them to switch restaurant selection. For repeat restaurant visits, value or dollar menus and everyday low prices activate the most switches from consumers at 58%, with BOGO (buy one, get one) offers being almost equally influential at 57%. Personalized promotions can be an essential part of helping consumers reach a decision, and machine learning can be the key to make that happen.
McDonald's is buying Dynamic Yield and plans to use machine learning and artificial intelligence to personalize its drive-thru menus. When you order in the future, you may see the menu changing automatically. Dynamic Yield is a machine learning startup that will provide the chain with the technology it needs. The system will use multiple factors to personalize your menu, such as weather, what you already ordered, current time and local events.
"The acquisition of Dynamic Yield is evidence that McDonald's is committed to innovating and improving the consumer experience. Improving the overall dining experience has been a long time coming, something that most restaurants have not made significant investments in for decades. This said, improving in-car dining has evolved from online ordering. McDonald's was not the first restaurant to offer online ordering, but they built on this ground-level technology to enhance the user experience by developing their app, installing in-store touchscreen kiosks and now optimizing their drive-thru process," Mathies says.
With this personalization technology, McDonald's will be able to guide the average time-crunched drive-thru visitor through individual menu choices with ease. However, the consumer is not the only one who benefits. To boost profits and increase order size, it is likely that McDonald's will tap this technology to suggest relevant complementary menu items to consumers.
"The use of machine learning to dynamically tailor the ordering experience is a nice fit for the drive-thru dining option. This is unlike mobile channels where brands can ask for a consumer to be personally identified and associated with a data-rich profile. The drive-thru needs to be frictionless to avoid customer frustration and, of course, delays for the convenience-oriented diner. Stopping the process to ask for a username or other identifier, often required for one-to-one personalization, would be a non-starter. McDonald’s new technology, if delivered as reported, will actually improve the order process speed while still offering a level of personalization, albeit done in a rather anonymous manner," Mathies shares.
For fast food restaurant visitors, the definition of value includes convenience. It is a smart choice for McDonald's to utilize technology that augments the perceived value of convenience. In this case, it is a simplified and personalized drive-thru experience. Thanks to Dynamic Yield’s technology, McDonald’s is able to differentiate itself from its competitors and offer something new that caters to evolving consumer demands, which commonly revolve around personalization, convenience and a streamlined purchase journey.
"The next level of restaurant tech will likely surface in mobile and in-car applications using voice assistants. These hands-free solutions will further solve the drive-thru experience by eliminating touchpoints across the consumer journey and making for a more hands-free process. We also anticipate further advances in programmatic advertising to better engage relevant consumers when they are in the vicinity of restaurants driving them to one of these frictionless ordering experiences," Mathies says.

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As a Partner and Co-Founder of Predictiv and PredictivAsia, Jon specializes in management performance and organizational effectiveness for both domestic and international clients. He is an editor and author whose works include Invisible Advantage: How Intangilbles are Driving Business Performance.Learn more...